Spread The Word: TPP Is Toxic Political Poison That Politicians Should Avoid

After nearly six years of negotiations, trade ministers recently announced they had reached agreement on the text of the Trans-Pacific Partnership. This does not mean the TPP is a done deal. The next hurdle for this rigged corporate power grab is to convince the participating governments, including Congress, to ratify it. In the United States, the trade justice movement, which has grown to be broad and diverse, can stop the TPP.

A policewoman removes activist Kevin Zeese for protesting the Trans-Pacific Partnership (TPP) as U.S. Trade Representative Michael Froman (R) testifies before a Senate Finance Committee hearing on “President Obama’s 2015 Trade Policy Agenda” on Capitol Hill in Washington January 27, 2015. The top U.S. trade official urged Congress to back the administration’s trade agenda on Tuesday and said an ambitious Pacific trade pact is nearing completion. Froman said the administration looked to lawmakers to pass bipartisan legislation allowing a streamlined approval process for trade deals, such as the 12-nation Trans-Pacific Partnership. REUTERS/Kevin Lamarque

Both chambers of Congress must ratify the TPP by a majority vote using a process called “fast track.” The trade justice movement fought a multi-year campaign to prevent Congress from giving the president fast-track trade authority. We delayed it for much longer than the corporate traders wanted, forcing the TPP into the election year. Since the TPP is “Toxic Political Poison,” an election year is not when they wanted to consider it. The corporate traders were required to compromise to pass fast track. One key compromise was making the text of the agreement public for 60 days before Congress considers it. This is a tremendous opportunity to educate and mobilize people.

Just after the TPP negotiators reached an agreement, we asked Ralph Nader if the TPP could be stopped. He said, “It will be stopped on its demerits.” He further noted its wide impact, saying, “Its scope is everything,” and described it as a “global corporate coup … the most brazen corporate power grab in American history.” The TPP, he said, is “a major peril to our national authority” that is “ceding our sovereignty, ceding our self-reliance, ceding everything we can do within the boundaries of the United States.”

He described how it takes legislative authority away from Congress and the White House and gives it to trade officials and trade tribunals. Nader described how it undermines the civil justice system, the third branch of government, and the federal court system because of trade tribunals with corporate lawyer-judges whose decisions cannot be reviewed by the federal courts. Nader described the TPP as “democracy suppression.”

If you care about corporate power versus democracy, and about jobs, the environment, health care, food, water, energy, climate, regulation of banks and more, then stopping the TPP needs to be a top priority. The agreement comes after six years of secret negotiations — secret to the public, media and elected representatives but not to hundreds of transnational corporations, their lobbyists and lawyers.

The deal is fragile. Negotiators had been near agreement for more than a year and the final two meetings were a struggle. The controversy around this the agreement will come out when it is made public and goes through national legislatures.

The campaign to stop the TPP and other rigged corporate trade agreements is planning ongoing actions. From Nov.14 to 18, when President Barack Obama and U.S. Trade Representative Michael Froman are in Asia for economic meetings, major actions will be held in Washington. Click here to register. People are sending emails to congressional leaders urging them to stop the TPP. A full-court press is planned for when the TPP is brought to Congress.

Politics of TPP getting complicated in Washington

The TPP will not have an easy time in Congress. Leading presidential candidates and congressional leaders have expressed opposition or serious reservations. And, some major corporate interests are opposed. An election year is not the time for controversial legislation, and the toxic TPP will be controversial.

The key will be the House of Representatives. Mega-transnational corporations and Obama are making passage a top priority. House Speaker John Boehner did too, and he was forced to resign because of his bullying tactics. He aggressively pressured Republicans to give Obama fast-track authority, pushing about 30 Republicans who opposed fast track to vote for it. After the vote, he punished those who opposed him, removed them from subcommittee chairmanships and from the Republican leadership. The Caucus revolted, and some of Boehner’s decisions had to be reversed. Members of the Caucus called for his replacement, and rather than fight that battle, Boehner resigned.

If this “Toxic Political Poison” can remove a Speaker of the House, will the next Speaker make passing the TPP a priority? Will he risk his career for Obama’s top priority?

“Unfortunately I am afraid this deal appears to fall woefully short” Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Finance Committee and one of the most important senators in the trade deal debate. (Susan Walsh/AP)

During the final negotiations key members of both parties wrote the Obama administration, warning there is no guarantee TPP will be approved by Congress. Sen. Orrin Hatch (R-UT), Sen. Ron Wyden (D-OR), Rep. Paul Ryan (R-WI) and Rep. Sander Levin (D-MI), said they better not bring back a bad deal because Congress will not support it. After the deal was announced, Hatch, chairman of the Senate Finance Committee and one of the most important senators in the trade debate, said, “Unfortunately I am afraid this deal appears to fall woefully short.”

This week, Big Pharma expressed its anger at the TPP requiring “only” an eight year patent monopoly for biologic drugs, when 12 years are the law in the United States. The U.S. will have to harmonize its laws with the TPP. Obama held a meeting with the pharmaceutical executives at the White House to assuage them, but he failed. The Hill Reports Big Pharma is “searching for a playbook in its effort to keep Congress from ratifying the deal next year.” Senator Hatch says that support for the TPP is shrinking in the Senate and “I’ve heard some very trying things that may very well make it impossible to pass.” The largest recipient of pharmaceutical funding is Majority Leader Mitch McConnell. He is also funded by the tobacco lobby, which is trying to top the TPP.

However, we know that we can’t take anything for granted. Enough promises and arm-twisting by the president, congressional leadership and heads of transnational corporations “convinced” just enough members of Congress (with massive donations) to vote for fast tack as were needed. We will have to do more than make phone calls and write emails to stop the TPP and protect our communities.

The TPP is a bad deal. Just like every other similar agreement, it is going to outsource jobs, lower wages globally, increase the wealth divide, increase the U.S. trade deficit, undermine democracy, weaken the federal court system, degrade the environment and undermine sovereignty at every level of government. The more people who learn about this deal, the worse it will look, and if we resist it, the likelihood of passage in Congress will shrink.

As TPP struggles, protests increase

The more than two year fight in Washington to stop fast track also made the environment more complicated for proponents. The battle over fast track was a brutal one. The final legislation built in requirements that cause multi-month delays from the time negotiators reach agreement to the time the TPP goes to Congress. And it built in the requirement that trade agreements be made public for 60 days before Congress begins to consider them. We will also know what laws need to be changed to comply with the TPP’s requirements. This gives the trade justice movement time to educate and mobilize people in opposition.Many of the challenges facing the negotiators are the result of people rising up all over the world against these trade agreements. This has made it more difficult for governments to negotiate, as they know if they go too far they risk rejection at home.

Even with fast track, it will be challenging to get Congress to ratify trade agreements. The timing has also put the countries involved in a bind, as multiple countries — especially the U.S. — will be in the midst of elections. The elections make it more complicated because in both parties there are key candidates like Hillary Clinton, Bernie Sanders and Donald Trump who oppose the agreements, as does Green Party candidate Jill Stein, making the TPP an election year issue. Members of Congress also seeking re-election know the TPP is toxic and supporting it could cost them their political careers.

Stopping the TPP and other trade agreements is going to require a mass mobilization on the streets and online. Political activists now recognize that the TPP impacts every issue, which is good for building a unified movement against it because that is necessary.

The TPP gives incredible power to foreign banks to move money in and out of countries without restrictions. It minimizes regulation of big finance to allow risk-tasking that endangers the world economy. Countries that need money will be enslaved by loans from big finance like Citigroup, and once they are in debt, they will be unable to stand up to the demands of banksters who threaten them as we witnessed recently in Greece.At its root, the TPP is about modern colonialism. It is the way that Western governments and their transnational corporations, including Wall Street banks, can dominate the economies of developing nations. To be part of the TPP, governments are required to allow foreign ownership of property, including buying land in signatory countries. The TPP allows corporate trade tribunals to overrule their laws, acquire resources cheaply and provide slave wages to workers. And, if all else fails, the U.S. and allied militaries will be there to enforce agreements.

The reality is that without trade justice there cannot be climate justice, food justice; there cannot be health justice or wage justice. Injustice in trade undermines all the issues the social movement is working to correct.

As a result the largest trade justice movement has developed and is growing. Be part of this cultural shift that will challenge corporate power and build the power of people.

Manipulation of the Gold Market: China has Imported 2400 Tons of Gold and the Price Goes Down…

We will no doubt look back upon the current era as the “crime of the century” for so many different reasons. Actually, current times represent the worst financial crimes of ALL TIME! The various crimes and how they are operated are too numerous to list and would probably fill a three volume set of books, let’s concentrate on just one. Central to everything is the U.S. issuing the global reserve currency by fiat knowing full well it truly means “non payment”. The absolute cornerstone to the dollar retaining confidence and thus value has been the suppression of the price of gold.

Before getting to specifically what I’d like to point out, let’s look at a couple common sense points which beg questions.

How is it China has been importing 2,400 tons of gold over the past two and a half years without any upward push to the gold price? This amount equals almost EXACTLY the TOTAL amount of gold mined annually around the world! How is it possible that ALL production has been purchased by China and yet the price goes down? The answer of course is quite simple unless you purposely close your eyes or disingenuously “apologize”.

The argument from the apologists is that “traders” on COMEX and LBMA believe gold will go lower so they are sellers and this is where the downward pressure has come from. You as a reader already know that much of the “selling” is done at midnight (or off hours) in the U.S. which is the lunch break in Asia, China specifically.

The massive selling (as much as total global production in less than two trading days) has usually taken place during off hours when the volume is lightest and price moves the most, especially with any significant volume. The result has been gold now trades at or very near the cost of production and silver well below production costs. None of this is new, only a refresher. The reaction in the actual physical markets is backwardation, premiums over spot prices and actual shortages. Put simply, low price has brought out additional physical demand.

To the point, the following is a snapshot of inventory movement (or the lack of) within the COMEX gold vaults this month:

Total accumulative withdrawals of gold from the Dealers inventory this month

nil

Total accumulative withdrawal of gold from the Customer inventory this month

184,991.8 oz

.

Only 185,000 ounces have been withdrawn from the customer (eligible) accounts and ZERO from the dealer (registered) accounts. What is not shown is there have been ZERO dealer deposits and ONLY TWO customer deposits in all month. One of 32,150 ounces and another of just over 300 ounces for the entire month! It is clear the large entry was a “kilo” deposit of one ton even though COMEX deals, quotes and supposedly delivers in ounces.

Why is this interesting you ask? Because at the beginning of the month there were over 10 tons worth of contracts standing for delivery with dealers only having just over 5 tons available to deliver. This figure has now dropped to about 3 tons standing …but the amount of registered gold for delivery is right where it was at the beginning of the month? How could this be if gold has been delivered? Is there a “secret stash” where gold is being delivered from or has “settlement” occurred using cash?

I have my own idea as to why no gold at all has entered the dealer’s vaults, it is a symptom of the disease. If gold was so plentiful we should have seen all sorts of movements of gold into dealer accounts to support deliveries, we have seen none, zero, NADA! Remember, October is an active delivery month which originally had over 10 tons standing for delivery versus 5+ tons available. If we go out to Dec., this contract has open interest representing some 11+ million ounces … while dealers claim only 182,000 to deliver!

Yes, yes, the open interest ALWAYS collapses and delivery “always gets made”. But doesn’t it seem strange to you that a market with less than $200 million worth of inventory is the pricing to a $5 trillion monetary asset? In comparison, a single ranch in Texas just got sold for nearly 4 times the size of what COMEX claims they have available for delivery. It used to be the tail was wagging the dog. Now, COMEX inventory has been bled down so far it can be said just a few hairs on the tail is wagging the dog!

Surely I will receive comments like “this will go on forever” or “don’t worry, nothing ever comes of these delivery months”. It should be pointed out, as it stands right now a single trade of 1,820 contracts represents the entire deliverable inventory and we have seen on multiple occasions where 3,000-6,000 contracts have been sold (in one trade) to collapse the price. I ask, how does COMEX keep this in the box when something very “REAL” happens? “Real” meaning a mere push of our financial system by China? Or a military shove by Russia? Or something as simple as a “truth bomb” being released on the American public? Can an inventory of less than $200 million fiat dollars make good and keep hidden the core crime to the crime of the century? Is this why China is moving toward a physical exchange? Once they “take it out …they will take it up”!

This article is part three of a three-part series on "Our United States of Indebtedness." Read the first two pieces in the series here and here.

Debt is one of the United States' most stringently enforced promises.

At least, that's true for those who cannot afford a high-powered legal team to fight it out in court. It's also true for the unfortunate many who don't work alongside revolving-door regulators who write and "enforce" the rules governing their once and future employers. And it's most true for non-corporate persons who cannot dispatch legions of lobbyists to secure billion-dollar bailouts and rewrite laws.

In the United States, all debtors are not created equal.

The depth of that inequality emerged after the crash of 2008 capsized the American dream. As billions of dollars worth of "promises" suddenly came due, it was quite obvious that the standards of enforcement for the captains of finance differed greatly from those applied to a multitude of drowning deckhands desperately clinging for life as their American dreams went underwater.

The biggest debtors were, according to the biggest debtors, simply too big to sink.

Almost immediately, bankruptcy took down the United States' fourth-largest bank - Lehman Brothers - amid a swirling mess of subprime securities. And a staggering list of financial institutions teetered on the brink of collapse and insolvency. But Uncle Sam rushed to "lend a helping hand" to the people who placed the risky bets that caused the crash in the first place. He even helped "stabilize" the predatory debt sharks who had hedged against their own risky bets because they saw the crash coming.

On the other hand, "average" Americans went begging while the government's massive bailout sustained AIG, Bank of America and, it seemed, nearly every other bank, fund and investment house under the sun. That's because the biggest debtors were, according to the biggest debtors, simply too big to sink. This dichotomy left "average" debtors gasping for air as liquidity was siphoned off for the well-connected sharks swimming in their own well-protected tank. Because their unpayable promises were the foundation of the entire financialized system, they - and they alone - got Uncle Sam's (also known as "taxpayers") undivided liquidity.

This was the key difference between the housing bubble and the savings and loan crisis. During the savings and loan crisis - when people were quickly losing their savings and, in many cases, their life savings - the Federal Deposit Insurance Corporation (FDIC) was there to cover up to $100,000 worth of losses. It buffered the impact of rampant speculation by the ironically named "thrifts" after deregulation allowed them to play fast and loose with money deposited into their once-staid institutions.

Yet, when this financialized bubble burst there wasn't an FDIC guarantee to buoy "average" Americans and keep them from going underwater on their mortgages. The FDIC doesn't do that. Nor does it bail out "average" Americans when they lose their 401(k) retirement dreams or mutual fund investments when the market tanks - like it did during the dotcom crash and after the housing bubble burst.

Nope, "average" Americans lost their wealth and had to keep their debt promises. And many handed over their American dream during the ensuing foreclosure crisis.

It was as if all the "kinks" had finally been worked out of the debt-driven system.

This time, there would be no appetite for prosecutions, no relief for middle- and working-class minnows and no real way to stop the highly leveraged bottom-feeding that, in fact, had finally become the basis of the entire economy. By the time President George W. Bush advocated shopping as a response to 9/11 and proposed the "Ownership Society" as a salve for the widening gash of income inequality, the decades-long financialization of the economy was already complete. And the government's acquiescence was a fait accompli.

But the perfect storm of wealth removal generated by the housing bubble and subprime economy wasn't just the result of 30 years of financial deregulation. It was also because, as the Organization for Economic Cooperation and Development (OECD) detailed in its report on financialization, the broadly based economy of "things" had been relentlessly replaced by the narrowly beneficial economy of credit (also known as debt). In that economy, deal-making increasingly reinforces the wealth of deal makers at the expense of GDP and at the expense of income-challenged debtors. Those debtors, in turn, are ever more reliant upon credit (also known as debt) to bridge the gap between income and the "middle-class" lifestyle.

In the post-dotcom, post-9/11 era of uncertainty, the huge majority of debt-addled, yield-hungry Americans sought security. What's more secure than "owning" a "home" in the hurly-burly age of Homeland Security?

Eager Americans poured wealth into the housing market. That influx stoked a profitable frenzy of mortgage securitization, exotic financialization and derivate deal-making. Even worse, the predatory subprime lending boom had a self-reinforcing effect on the bubble by warping supply through stoking demand and competition for houses. It's kind of like using low-interest loans for stock buy-backs or Ronald Reagan floating "Morning in America" on the government's credit card. It's easy to create the appearance of growth by leveraging debt.

And that's what the housing bubble was ... a debt-driven reach for yield through greater and greater risk-taking built on more and more leverage with a big "credit default swap" cherry on top.

Dinner Is Served

Wall Street had a point. It was "too big to fail."

When the crash hit, the "hard" economy of things had been shipped overseas. The ability to buy cheap widgets made in China depended upon widely available credit. And the United States' "wealth" was far more dependent upon market perception than on economic fundamentals. It was an economy built on leverage and a "through the looking glass" view of outstanding debt obligations as valuable, tradable assets.

In 2001, the Federal Reserve flooded the zone with leverage when it lowered its benchmark rate from 6 percent to 1.75 percent in just 11 months. This wave of "credit" - which is really another word for "debt" - artificially fueled spending and speculation even as the fallout from the last bubble - the dotcom bubble - was still being sorted out.

So much for "market forces."

In 2003, when that leverage fueled looser mortgage lending and the housing bubble was quickly expanding, the "average cardholding household" had "six credit cards with an average credit line of $3,500 on each - for a total of $21,000 in available credit," according to a study by Demos. The "go-go" financial system was giving average Americans a lot of credit.

Securities fed yield-hungry financial sharks swimming in the gray area between the "free" market and government policy.

By the time then-Fed Chairman Alan Greenspan lowered the rate to 1 percent in 2003, Fannie Mae and Freddie Mac had already issued $1.5 trillion in outstanding debt. Over the next two years, they purchased another $434 billion in securities backed by subprime loans. The policy of loose lending by Freddie and Fannie began (like so many of these financial parlor tricks) at the end of the Clinton administration. But, as Carol D. Leonnig of The Washington Post reported during the crash, the two agencies were further unleashed during the midst of the bubble to "buy-buy-buy" subprime mortgages packaged into securities.

That bubble-blowing policy was compounded in 2004 by a new Securities and Exchange Commission "regulation" that rewarded the five biggest financial sharks - Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns - with an approving stamp of "regulatory compliance" if they radically increased the amount of their securitized "assets" (also known as "debt") that were backed by mortgages. And they did.

The big five's desire to "come into compliance" stoked demand for mortgage-backed securities. That, along with Wall Street trading and a push by the Department of Housing and Urban Development to buy up subprime securities, altered supply and demand in the housing market. Instead of just being driven by a demand for houses, the market was also being driven by a demand for packaged mortgages. Those securities fed yield-hungry financial sharks swimming in the gray area between the "free" market and government policy.

In essence, the fix had been in all along.

This bubble was so intertwined with government policy and the revolving door had spun so often between Wall Street and successive administrations that there really wasn't a snowball's chance in hell that Uncle Sam wouldn't cover the risky promises made by unfettered financial wizards. Because they'd transformed home ownership into an exotic financial instrument, there really wasn't anything to "bail out" when "average" Americans looked for help. Their homes were little more than an electronically transferred bet in an elaborate system of risk commoditization. It wasn't a federally insured savings account.

Meanwhile, the debt sharks circled the political class in Washington. They said the "entire financial system" was on the brink of collapse. They warned of global turmoil and a second Great Depression. In response, Uncle Sam basically set the table for "too-big-to-fail" behemoths to get even bigger by simply throwing the almost comically named TARP over the whole mess.

Feeding Frenzy

The Troubled Asset Relief Program, also known as TARP, was the Bush administration's costly response to the 2008 financial crisis. In October of that year, Congress passed the Emergency Economic Stabilization Act of 2008 and it was quickly signed into law. In essence, it was an ex post facto FDIC for the financial speculators who had blown the housing bubble and, in the process, cost millions of people their homes and livelihoods. The Treasury Department was empowered to use TARP to "cover" Wall Street's losses and restore stability and confidence to markets. It did nothing to cover the losses of the victims of predatory lending or those subjected to the vicissitudes of a manipulated market.

It's been part of the financialized boom-and-bust cycle since the Supreme Court opened the floodgates of credit (also known as debt) with the Marquette decision in 1978. For those with liquidity and influence, or, even better, the kind of liquidity only influence can buy, each inevitable crash presents profitable opportunities. Insiders know that money is makeable on the boom and the bust. It's what financialization is all about. It's not about making widgets in factories or long-term investing in the "hard" economy of things. It's about short-term "plays" that involve electronic transfers of risk and leveraged takeovers of cut-rate assets.

And that's exactly what happened.

An array of highly financialized "institutions" not strong enough to weather the post-crash storm got gobbled up by the sharks given the government-backed strength to find value in the chum. As a result, the number of banks declined by 12 percent between 2006 and 2010 and the share of total deposits held by the 10 biggest banks rose from 44 percent to 49 percent, according to a study by the Federal Reserve Bank of St. Louis. But that consolidation was just one part of a post-crash course in asset hoarding. The beneficiaries of the bailout also leveraged government-supplied liquidity into big profits.

Despite a wave of painful post-crash deleveraging, Americans are still swimming into deeper and deeper red ink.

Even more opportune was the real estate "play" by private equity firms like the Blackstone Group that exploited 10 million foreclosures left by the burst bubble and sometimes taken through specious, fraudulent practices like "robo-signing." Blackstone is the world's largest private equity firm and it quickly became one of the nation's largest landlords. They, along with other heavyweights like Colony Capital and Cerberus Capital Management, have now moved into the business of floating smaller landlords as they feed upon the super-heated rental market.

As for the "robo-signing" scandal, the biggest abusers put their vast liquidity to work by reaching two deals to make the criminal complaints disappear: a $25 billion settlement between five banks and 49 state attorneys general in 2012 and a $9.3 billion settlement between 13 banks and federal regulators in 2013. In March 2015, JPMorgan Chase paid $50 million to wipe away "perjurious dealings in tens of thousands of mortgages in the aftermath of the mortgage crisis." It was barely a drop in the bucket for the financial mega-shark.

It now has $253 billion in market capitalization, making JPMorgan Chase one of the 10 biggest companies in the United States, joining a list with bailout beneficiary Wells Fargo and Walmart. Just offshore are Bank of America and Citigroup at the 18th and 20th spots on the list.

But the story couldn't be any more different for those "average" Americans who got sucked into the subprime tsunami. They didn't have the liquidity or the connections needed to turn the greatest financial crisis since the Great Depression into a rare, profitable opportunity to feed on competitors or gobble up their neighbors' cheap assets.

In October 2014, Reuters reported on the "post-foreclosure hell" still burning holes in the wallets of many Americans. That's because mortgages can haunt debtors long after they've gone underwater and lost their homes. Over the last few years, lenders have used "deficiency judgments" to seek repayment on loans, fees and penalties that accrued up to and during foreclosure. Even as people struggle to rebuild wealth, relentless lenders target their assets and garnish their wages - and not with a sprig of parsley or an orange wedge.

But that's not the end of the nightmare.

Reuters also reported the rise of "zombie titles" - a monstrous mounting of unpaid debts, fines, fees and assessments that stalked homeowners who had thought they'd "lost" their houses to foreclosure, only to find out later that, for instance, JPMorgan Chase decided it wasn't worth the trouble to complete the foreclosure after evicting the occupants. Out of nowhere, they found "their wages garnished, their credit destroyed and their tax refunds seized." And some even faced jail time.

So, while JPMorgan Chase, Bank of America and other bailed-out mega-sharks spent seven years consolidating, hoarding and avoiding even the threat of jail time by forking over tax-deductible penalties to revolving-door regulators, "average" Americans went back to square one in an economy that has one in three Americans teetering on the brink of financial ruin.

In spite of a drop in household debt relative to pre-crash levels, many are still locked into a consumer credit system. A study by Card Hub found that the average household's credit card balance for the first quarter of 2015 was $7,177. That's the highest it's been in six years. And the Federal Reserve reported that Americans added $20.7 billion in debt in June. That brings "total consumer borrowing to a record $3.42 trillion," according to The Associated Press. Despite a wave of painful post-crash deleveraging, Americans are still swimming into deeper and deeper red ink.

The United States, in Red and Black

"Average" Americans didn't get floated on a flood of bailout bucks. They didn't get access to the Fed's freebies during quantitative easing. Nor did they have the money or connections to wipe away legal obligations by cutting deals to pay tax-deductible fines. But the two-tiered system was, perhaps, most apparent in the fact that they also found themselves restricted by another option open to the United States' corporate persons - the slate-cleaning option of bankruptcy.

Unlike Lehman and a host of other major companies, most Americans bumped up against new regulations limiting access to a much-needed legal life preserver for individuals sinking in untenable debt. Whether it was just an odd coincidence or, for the more sinister-minded, perfect timing, bankruptcy laws were tightened by Congress just as the debt-driven economy blew the housing bubble to it biggest point.

After "years of intense lobbying" by the credit card industry, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It regulated access to bankruptcy, sharply raised the cost of filing and instituted a "presumption of abuse clause" for individuals seeking Chapter 7 relief, which eliminates most, if not all, debt. Basically, credit card companies wanted to raise the bar on bankruptcy and make sure "average" Americans were not "abusing" the financial system with a de facto bailout that eliminated bad debts.

Bankruptcy "reform" caused an additional 800,000 defaults and 250,000 foreclosures before and after the crash.

To make sure consumers kept their promises, they came up with a formula that compared a filer's income to the median income of their home state. If they make slightly more than the median, they are "abusing" Chapter 7 and go directly to the three-to-five-year repayment plan built into Chapter 13. So, in stark contrast to years of successive deregulation for the financial industry, Congress decided to clamp down on risk-taking consumers.

But there was an additional irony built into the bankruptcy bill. It may have helped trigger the crash of 2008. At least that's what two accomplished economists determined in 2009.

According to Michelle J. White and Wenli Li, raising the bar on bankruptcy removed an all-important pressure-relief valve on the United States' giant steam engine of debt. By blocking distressed borrowers from getting debt relief, congressional credit card cronies doomed those who might've otherwise been able to pay their mortgages thanks to bankruptcy protection. Instead, their financial fortunes cratered and they defaulted on their mortgages. Based on their calculations, the bankruptcy "reform" caused an additional 800,000 defaults and 250,000 foreclosures before and afterthe crash. The kicker is that borrowers who defaulted on mortgages were so bereft that they often ended up filing for bankruptcy, anyway.

That's right. Back in 2005, when total student debt was less than $400 billion and the average student loan was $16,651, Congress suddenly decided to ratchet up regulations on students borrowing money to get a degree at a for-profit "college" or seeking private loans to help buy an education. It wasn't frivolous borrowing, either. The media and politicians said repeatedly for two decades that all the good-paying jobs required a college degree. It was the only way to compete in the global economy, right?

And while Congress cracked down, predatory mortgage lenders swam freely and easily into deeper and deeper risk. The dichotomy would be comical if it wasn't so prescient.

That's because student loan debt is now a $1.2 trillion bubble. Some believe it's ready to burst and others believe it's troubling, but manageable. Interestingly enough, the reason why some refuse to say the student loan sky is not falling is the fact that this time, the leading risk-taking financier isn't a hedge fund or a traveling band of exotic financial instrument players. It's Uncle Sam.

That's right, the US government holds approximately $1 trillion of that $1.2 trillion total and, as of 2014, student loan debt comprised 45 percent of federally owned financial assets. One oddity of Uncle Sam's loan business is that it brings upward of $51 billion into the Treasury - enough, as Forbes noted, to cover "two-thirds of the lifetime cost of the entire F-22 fighter jet program!"

Student loans are wealth removal machines widening the gap between those privileged few in the black and the teeming masses stuck in the red.

The defense analogy is apt because the rise in student debt is directly tied to the inflating cost of college tuition. A recent study by the Federal Reserve Bank of New York found a direct correlation between the epic 46 percent spike in the cost of college over the last 10 years and the much-discussed rise in student debt. Institutions reacted to the growth in federally subsidized student loans by charging more to go to school - with students acting as a profitable "pass-through" for revenue-hungry colleges. It became a college-industrial complex and it forced entire generations into a bizarre form of indentured servitude.

It's a familiar model.

Like credit cards, subprime mortgages or any number of debt-driven schemes employed by the financial system, student loans are wealth removal machines widening the gap between those privileged few in the black and the teeming masses stuck in the red. The debt-driven student loan system typifies the nearly four-decade-long process of financialization and indebtedness that began in 1978.

To wit, current graduates are the most indebted generation in history, supplanting grads from the previous year. That means their ability to acquire wealth is inexorably compromised by the anchor of debt weighing them down before they ever get started.

According to the Government Accountability Office, student debt carried by people 65 and older rose by more than 600 percent between 2005 and 2013. It now stands at $18 billion. Unlike boomers, Gen Xers are the first generation to do less well than their parents, thanks in part to the wealth limitations of student and household debt. Although 82 percent of degree holders "earn more" than their parents, only 30 percent have more actual wealth as a result. Gen Xers' debt totals - including student loans, medical debt and credit card debt - is six times their parents' levels at the same age. Americans age 35 to 44 have the fastest growing income gap. And savings and retirement remain woefully out of reach for more and more Gen Xers.

Like everyone else in the 99%, there is no bailout coming for boomers, Gen X, Gen Y or millennials.

In spite of some painful deleveraging of consumer and mortgage debt (and loss of wealth) after the crash, one survey showedthat 48 percent of Gen Xers (age 35 to 48) and boomers (age 49 to 67) use credit cards as "a financial survival tool." And Gen Xers got on the debt treadmill early. Some 76 percent said they got their first card by age 24 and now carry an average of $144,000 in mortgage debt and $8,000 in average credit card debt. Boomers, by the way, average about $6,000 in credit card debt.

Like everyone else in the 99%, there is no bailout coming for boomers, Gen X, Gen Y or millennials.

The unevenness of "recovery" is much the same.

Aggregate net wealth is now over $81 trillion. It's surpassed pre-crash levels. But, according to two economists from the London School of Economics, combined wealth of the richest 160,000 equals the combined wealth of the poorest 145 million families. This concentration matches pre-Great Depression levels, thus completing the 40-year paradigm shift away from the New Deal that began with the Marquettedecision in 1978.

So, is it déjà vu all over again?

A new tech bubble is growing on Wall Street and the liquidity and leverage needed to profit from it is more exclusive than ever, as is the ability to invest in or own a start-up. As reported by Quartz, that's the sole legal right of "accredited investors" with a net worth of $1 million or two consecutive years of income exceeding $200,000 per year. So, regulations keep the 99% out of the world of billion-dollar unicorns riding over otherwise deregulated rainbows in search of endless, pre-revenue pots of gold.

Of course, post-crash Dodd-Frank financial regulations remain incomplete. Not one of the biggest predatory lending sharks, subprime financiers or risky derivatives dealers was ever prosecuted, let alone sent to jail. But medical debts remain inescapable for less well-heeled Americans, even as Congress further socialized the risk of the still-expanding derivatives market - putting taxpayers on the hook for a potentially staggering $303 trillion in derivatives thanks to language written by Citibank and inserted into a spending bill.

The reach for yield continues as financialized banks invest in prisons, and big debt collection agencies are empowered by local governments to track down unpaid parking tickets and income-challenged Americans. Some of them actually go deeper into debt by putting rent-to-own tires on their cars because they don't have the cash to buy a set. In the end, they pay triple what it would've been had they just been able to buy tires outright.

While these debts are an anchor for most, debts also fuel rising yachts - either through interest collected from "customers" or through Fed-provided leverage to play the market or through buy-backs that stoke garish 800 to 1 income disparitiesbetween "successful" CEO and their workers.

Americans are far more divided by the bottom line than by political posture or proclivity.

Since financialization took off in the 1980s, working- and middle-class households have incrementally replaced liquidity and wealth with debt and interest. The post-crash United States is the sum total of that process. A new Pew Study found that 7 out 10 of all Americans said debt is a "necessity in their lives" despite the fact that they'd "prefer not to have it."

The "leaders" of the economy replaced "hard" investments in the actual economy of widgets and things with big government-sanctioned "plays" in credit and leverage. They keep their profits safely offshore. They are loath to invest in hard economic growth that broadly raises incomes or the pool of wealth. And financialization has transformed consumer consumption into a wealth removal machine as corporate profits cycle through distant lands before pooling under snazzy yachts floating in azure seas around the Bahamas.

This process transformed the United States into a "company store" where no matter how hard you work, and how much productivity you achieve or exuberance enjoyed during one of the bubbles, the simple fact is that the debt-driven economy means you'll always end up owing the house more than you make.

It's why it makes less and less sense to divide Americans into facile political camps of red and blue. In truth, Americans are far more divided by the bottom line than by political posture or proclivity. Instead, maps of the United States should show that "the many" are stuck bobbing in a tsunami of red ink, while a very few float safely by the shoals of financial crisis on a black sea of government-guaranteed liquidity.

JP Sottile is a freelance journalist, published historian, radio co-host and documentary filmmaker (The Warning, 2008). His credits include a stint on the Newshour news desk, C-SPAN, and as newsmagazine producer for ABC affiliate WJLA in Washington. His weekly show, Inside the Headlines w/ The Newsvandal, co-hosted by James Moore, airs every Friday on KRUU-FM in Fairfield, Iowa. He blogs under the pseudonym "the Newsvandal."